Affordable Housing and Zoning
Department of Housing and Urban Development Secretary Ben Carson has launched an initiative aimed at making housing more affordable. He has correctly identified zoning and land-use regulations as a major factor in soaring housing costs in many locales.
Zoning and land-use regulations arbitrarily restrict the freedom of builders and developers. Minimum lot sizes, prescribed land uses, setbacks, and other controls prevent developers from responding to market demands. Instead, they must satisfy the dictates of politicians and bureaucrats. These mandates and prohibitions ultimately cost money, and those costs are passed on to home buyers and renters. National Review cites studies that show
that such regulations add as much as 20 percent to the cost of a home in Baltimore, Boston, and Washington, 30 percent in Los Angeles and Oakland, and an astounding 50 percent or more in cities such as San Francisco, New York, and San Jose.
The traditional government approach for making housing more affordable has been more subsidies, which simply shifts the burden to taxpayers. Carson intends to require local governments to reduce zoning and land-use regulations as a condition for receiving federal housing funds.
While Carson’s plan isn’t ideal, it is certainly a step in the right direction. If local governments want to whine and complain about the lack of affordable housing, then they must acknowledge their own culpability. And then they must begin repealing the laws and regulations that drive up the cost of housing. Until that happens, affordable housing will continue to be a problem for the poor and middle class.
The primary cause for the lack of affordable housing has been zoning and other land-use regulations. More government programs are not the solution. The proper solution is fewer regulations and controls.
Consumers have a broad range of choices when purchasing cell phones, televisions, computers, automobiles, and virtually any other product. Manufacturers are free to produce the products that they believe consumers want. The result is an array of products with different features, quality, and prices. Each consumer is free to choose the products that meet his needs and budget.
Consumers would have the same variety of choices in housing if the producers–builders and developers–were free.